Basic Security Deposit Law for Residential Tenants
Residential Tenants
Typically, a landlord is limited to charging a security deposit equivalent to one month's rent, as stipulated in 14 DCMR 308.2.
Furthermore, security deposits are usually mandated to be maintained in an interest-bearing escrow account, which must be established and held in trust within a financial institution located in the District of Columbia, insured by a federal or state agency. This account should solely serve the purpose of safeguarding such deposits or payments, in accordance with 14 DCMR 308.3.
Additionally, it is generally required that at the conclusion of each calendar year, a landlord must display, both in the lobby and the rental office where the deposit is held, the interest rate applicable for each six-month period in the preceding year, as specified in 14 DCMR 308.7. Similarly, at the end of the tenancy, the landlord is generally obligated to furnish the tenant with a record of the interest rates for each six-month period during the tenancy, as per 14 DCMR 308.7.
If a tenant has occupied the property for a minimum of twelve months, they are eligible to receive interest on their security deposit, as per 14 DCMR 311.2. The interest is disbursed to the tenant if the security deposit was held in an interest-bearing account, as required by law. In cases where the deposit was not held in such an account, the interest is calculated based on the court judgment interest rate, as outlined in 1 DCMR 2941.3.
Within 45 days following the conclusion of the tenancy, the landlord must take one of the following actions: 1) return the security deposit along with any owed interest to the tenant, or 2) provide written notice to the tenant stating the landlord’s intention to retain a portion or all of the deposit, in accordance with 14 DCMR 309.1. Subsequently, within 30 days of this notification, the landlord must return the appropriate funds to the tenant. Along with the return, the landlord is required to furnish an itemized statement detailing the repairs and other expenditures for which the deposit was utilized, along with the associated costs, as stipulated in 14 DCMR 309.2.
Landlords are only permitted to withhold a security deposit for reasons that have been explicitly documented in writing, typically within the lease agreement established at the commencement of the tenancy, as per both 14 DCMR 308.6 and 14 DCMR 309.1.
Should a landlord withhold a security deposit in bad faith, they become liable to the tenant for three times the amount of the security deposit, as outlined in 14 DCMR 309.5.
Tenants who wish to contest a landlord’s decision to withhold their security deposit have two options: they can either submit a Tenant Petition to the D.C. Housing Resource Center or file a Statement of Claim in D.C. Superior Court, often processed through the small claims court system.